Impact of COVID-19 in Seychelles |17 March 2020

The high level economic forum yesterday at State House (Photo: Thomas Meriton)

Revised 2020 budget before National Assembly by March 31

In light of the COVID-19 pandemic, the Ministry of Finance, Trade, Investment and Economic Planning is working on revising the 2020 approved budget to prioritise health and food security.

This announcement was made following a high level economic forum at State House yesterday which brought together the seven main sectors of the economy to discuss their contingency plans now that Seychelles has confirmed its first cases of COVID-19.

It included representation from the Ministry of Finance, Trade, Investment and Economic Planning; Ministry of Employment, Immigration and Civil Status; Ministry of Tourism, Civil Aviation, Ports and Marine; Ministry of Fisheries and Agriculture; department of health; Central Bank of Seychelles (CBS); Seychelles Trading Company (STC); Seychelles Petroleum Company (Seypec) and the Seychelles Chamber of Commerce and Industries (SCCI).

“We have to concentrate on the two main important things: the health of our citizens and food security. If the two fails, we will have a real problem on our hands,” Minister for Finance, Trade, Investment and Economic Planning, Maurice Loustau-Lalanne, stated yesterday.

He noted that the revised budget is expected to be put before the National Assembly by March 31.

For the first time in about 10 years, the new budget will be in direct opposition to the country’s efforts to ensure budget surpluses at the end of each financial year.

“Because we need more money to deal with the impacts of the virus, we will have to break down the 2020 budget and come up with a new one which unfortunately will not have a primary balance,” Minister Loustau-Lalanne explained.

The minister stated the government will have to review its capital projects and even put some on the back burner in order to free up funds to deal with the current situation at hand.

“It is important to ensure that Seychellois remain in employment, that challenges faced by businesses are addressed through moratoriums which will be announced later and, at the same time, ensure that our health and access to food remains top priorities,” he further said.

Minister Loustau-Lalanne stated that President Danny Faure will make a nationwide announcement on Friday in regards to further fiscal measures which will alleviate the impact of the novel coronavirus on the country’s economy and other areas.

Minister Loustau-Lalanne confirmed that both Seypec and STC hold reserves which will last for around several months and have systems in place to re-order more stocks.

“It is not necessary for us to go into panic mode and buy everything,” Minister Loustau-Lalanne advised.

In relations to the business sector, he said: “There is a great possibility that we will not remove value added tax (VAT) like some businesses have asked but we are considering other measures that are more uniformed and that will touch more people.”

“The Central Bank and commercial banks are in discussions to see how to put a moratorium on the payments of loans and interests. Discussions include for how long to defer these loans and who will absorb this hit,” Minister Loustau-Lalanne revealed.

On his part, the principal secretary for agriculture Antoine Marie Moustache noted that his department is looking into the potential of importing essential food items from countries in the region such as Kenya, Ethiopia, South Africa, Mauritius and Madagascar.

These countries are relatively close to Seychelles and hence easier and faster to import from if the need arises.

In terms of food security, Mr Moustache noted that his department has also assessed its stock of fertilisers and seeds, both of which are enough for approximately three months.

The department of agriculture has however made some additional order for more fertilisers.

“We have already interacted with a local company producing animal food to see how they can assist in this time of crisis. They have enough stock to support us in the months to come," said Mr Moustache.

“These countries are located in our region and hence relatively close by for transportation. Each of them has commodities that we can import if the need arises.”

On his part, the chairperson of SCCI, Oliver Bastienne said that the business sector is extremely concerned over the impact of COVID-19 on businesses, the engines of the economy, and noted that he has brought various solutions to the attention of the government.

Elsie Pointe